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Solutions to Credit Card DebtDownload the FREE Guide to the Top Sources of Passive Income
Looking for solutions to credit card debt? There are actually many ways to negotiate, reduce and eventually eliminate credit card debt. Here are the most effective ones that you can implement right now. Negotiating credit card debtThe best solution to credit card debt is to first negotiate credit card debt. As the credit card market is so competitive, some banks can be surprisingly willing to lower their rates in order to retain a good customer. Do not hesitate to suggest that you might need to switch to another credit card company because it offers better rates. The profit margins on the existing rates are already so high – the banks will continue to profit even on lower rates. Do not hesitate to suggest that you might have to default on your credit card debts. This literally scares the banks. Banks are usually more than willing to lower interest rates for six months and sometimes even a full year in order to help you repay your credit card debt. In order to avoid the hassle (and the legal/administrative fees) of having to chase after a defaulting customer, banks will usually rather lower interest rates for you. Reducing credit card debtCredit Card Debt Solutions: APR > Savings Interest rateOnce you have got the best interest rates possible, focus entirely on reducing credit card debt. The first step is to use your savings to pay off credit card debt. This sounds counter-intuitive, but it actually makes much more financial sense: While your savings usually earn less than 1% a year sitting in your bank accounts, you pay interest rates of 16 to 20% on your credit card. This is also the Annual Percentage Rate (APR) –the interest rate which most people worry about. It derives from your periodic rate multiplied by 365. What is 1% minus 16%? Yes, you are making a loss of 15% per year by not using your savings to pay off your credit card debt! Credit Card Debt Solutions: Never pay just the minimumAlways pay more than the minimum! The less you pay each month, the more interest you pay in the long term. Solutions to Credit Card Debt: Prioritize!The best way to get rid of credit card debt is to make it your most important financial priority. With average interest rates of 16%, it is the costliest form of debt to maintain. Work on eliminating it entirely before you work on reducing other forms of debt. ***C2_invitation_21464505*** Free Billion Dollar Income NewsletterSign up for the free Billion Dollar Newsletter. Filled with ideas and strategies on generating wealth, personal effectiveness, how to apply the law of attraction, how to make money online and more, this newsletter is a powerful way to start your week. Your email address will be kept confidential. Easily unsubscribe at any time. Sign up right here: Feel free to link to this page to share the information here
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